The market for US government bonds shows that the US Federal Bank (Fed) should reduce interest rates, according to the finance minister USAScott Bessed.
“We see that the two -year interest rates are now below federal capital rates. So this is a market signal that they believe that the Fed should reduce interest rates,” the US minister said in an interview with Fox Business.
The yields of two -year government bonds were at 3.57% today (1.5.2025) in New York, compared to the 4.33% federal reference rate. The Fed is currently targeting the basic interest rate in a range of 4.25% to 4.5%, according to Bloomberg.
Fed policymakers have implied that they are not yet ready to resume interest rates, with inflation still running above the 2% target and given the possible pressure on prices that will come from Donald Trump’s duties. The Fed decides on interest rates next time on May 7, when almost all economists predict that they will remain unmoved.
Trump has repeatedly criticized Fed President Jerome Powell because he did not lower interest rates this year, saying on Tuesday that “I have a Fed person who does not really do a good job”.